The global refined copper market ended the first half of 2019 with a supply deficit of about 220,000 mt, according to preliminary data the International Copper Study Group released Monday.
Factoring in changes to unreported, bonded stocks in China, the deficit likely totaled 190,000 mt, the Lisbon-based research group said.
World mine production declined about 1.4% in H1 to nearly 9.92 million mt, with concentrate production declining 1% and solvent extraction-electrowinning by 3.5%.
Reduced output in two major producing countries, Chile and Indonesia, more than offset growth in other countries, ICSG analysts said.
Production in Chile, the world's largest copper producer, declined 2.5% mainly because of lower copper head grades, while concentrate production in Indonesia dropped 55% as a result of the transition of two major mines to different ore zones.
After aggregated growth of 13% in 2018, output in the Democratic Republic of Congo and Zambia remained essentially unchanged in the first half as temporary reduced production at some mines offset ramp-up output at other operations.
Production in Peru, Australia, China, and Mongolia increased because of improved grades and recovery from constrained output in 2018, the ICSG said.
On a regional basis, mine production is estimated to have increased around 2% in North America and 7% in Oceania, but declined 6% in Asia, 1% in Latin America and 3% in Europe and remained essentially flat in Africa, according to ICSG data.
REFINED OUTPUT DIPS 1% IN H1
World refined production declined about 1% in H1 to 11.74 million mt, with primary production (electrolytic and electrowinning) down 1.5% and secondary production (from scrap) increasing 1%, ICSG analysts said.
"The fall in world refined production was mainly due to a 38% decrease in Chilean electrolytic refined output due to temporary smelter shutdowns whilst undergoing upgrades to comply with new environmental regulations," the ICSG said.
Total Chilean refined production (including SX-EW) dropped 15%.
The global decline was also because of a 33% falloff in Indian production, which was negatively affected by the shutdown of Vedanta's Tuticorin smelter in April 2018.
Zambian refined output fell 28% in H1 because of power supply interruptions, smelter outages and the January 1 introduction of a 5% custom duty on copper concentrate imports constraining smelter feed.
The overall declined was helped by reduced output in Japan, Peru, the US and a few European countries because of smelter maintenance shutdowns.
"However, these reductions were largely offset by growth in Chinese output and by increases in countries recovering from production constraints in 2018 such as Australia, Brazil, Iran, and Poland," ICSG analysts said.
On a regional basis, refined output is estimated to have increased in Asia (2%) and in Oceania (15%) but declined in Africa (-9%), the Americas (-10%) and in Europe (-1%).
H1 REFINED USAGE SLIDES 1%
Preliminary data indicates that world apparent refined usage declined about 1% in H1 to 11.96 million mt, the ICSG said.
"Although Chinese net refined copper imports declined by 16%, Chinese apparent usage grew by around 3% as a consequence of higher Chinese refinery output," according to ICSG analysts.
Among other major copper users, demand increased in India and Taiwan (China), but declined in the EU and Japan. World ex-China usage declined around 3% in H1.
